Panhard bars work to: 

• Keep the rear axle from moving side to side
• Keep handling consistent 
• Reduce chassis flex/twist
• Eliminate rear-steer
• Help with cornering

What many would argue is the most important function of the panhard bar is it keeps the rear axle moving from side to side. Without the panhard bar keeping the rear axle from making lateral movements, you would suffer from rear-steer, which basically means your wheels shift and steer you towards an undesired path. For example, A 1999-2004 Mustang's rear axle can move up to 2 inches side-to-side under harsh conditions.

With the configuration of panhard bars bracing your chassis laterally in the rear, chassis flex from going around a turn is greatly reduced. Panhard bars help to keep the handling of your Mustang predictable and consistent, which is why aftermarket ones will greatly improve your cornering limits. Some additional benefits to expect, aside from stable cornering and overall handling predictability, are lowering the vehicle’s rear roll center. This prevents the inside of the rear tires to lift off the ground when you go around corners, further giving you more stability.

The stock Mustang panhard bar is heavy steel, uses rubber bushings, thin in diameter, non-adjustable, and can flex under heavy loads of force. An aftermarket Mustang panhard bar is typically much lighter than stock and made from aluminum or tubular DOM steel, uses polyurethane bushings or higher quality rubber ones, will be thicker than the stock one, and will flex much less if not barely at all even under extreme lateral force. Aftermarket panhard bars are available in both adjustable and non-adjustable formats allowing for even more improved suspension tuning.

Non-adjustable Mustang panhard bars are more ideal for non-lowered cars and are generally less expensive than their adjustable alternatives. Adjustable panhard bars allow you to precisely dial in your suspension and get the rear axle perfectly in spec and centered. If you track your Mustang and/or have it lowered, then you will definitely want to upgrade your panhard bar. Ideally to an adjustable one.

If you run lowering springs on your Mustang or have the suspension lowered by any other means, then you will almost definitely need an aftermarket panhard bar to keep the axle in check and centered. When you lower your Mustang and reduce the ride height, your axle will shift ever so slightly to the left or the right as the dynamics have changed. 

Replacing it with an aftermarket one will allow you to re-center the axle so your handling doesn’t get compromised.

The panhard assembly mounts to the chassis on both sides right above the rear. The adjustable rod extends from the passenger side of the panhard assembly to a bracket that is installed on the bottom mount of the shock. The panhard bar will clear any car with a factory exhaust setup or an aftermarket following the same pipe routing as a factory setup.

To get the most out of a panhard bar, I would recommend investing in a set of upper and lower control arms. When selecting an upper control arm it is recommended to stay with a rubber bushing instead of a spherical design that is all metal. By purchasing control arms you will eliminate even more of the lateral movement of the rear and further improve your handling and launching abilities. Another part to consider would be a torque arm. This eliminates the need for upper control arms completely and offers more traction, improved launching, and even more handling predictability.

You can increase your handling capabilities a step further with a Watts Link Suspension setup in place of panhard bar. If you are looking to drastically improving the cornering of your Mustang, especially for road racing or autocrossing. Watts Link Suspension setups directly replace the panhard bar and work to combat both lateral and vertical axle movement. 

Essentially, Watts Link Systems help your LRA setup feel more like an independent rear suspension (IRS) setup as the wheel hop you may experience in corners is greatly reduced. Watts Link systems are more expensive than panhard bars, but the handling benefits can easily justify their benefits.

The rear suspension underwent a significant change in the 2005 model year, in the form of how the rear axle is positioned under the car.

• The four-link suspension setup was nixed in favor of a three-link panhard bar setup
  
• The panhard bar is tasked with the job of properly locating the rear axle from left to right
• With a panhard bar, as the rear axle rises and falls, the movement is in a slight arc instead of completely vertical. As the car is lowered, and the result is that the rear end will shift slightly to one side as the car is lowered
• The solution to this shift is an adjustable panhard bar to replace the fixed length factory bar. This allows the rear end to be properly centered again, once the vehicle is lowered.

An independent rear suspension would have added a substantial cost to the initial price of the Mustang. The panhard bar setup still allows the Mustang to keep the solid axle while providing cornering ability improvements that suit most owners better than previous generations of the Mustang